The Australian dollar got a boost against the greenback on Monday following a surprise election victory by the country's conservative government, while the yen dipped slightly on a recovery in market sentiment.

The dollar index against a basket of six currencies was largely steady at 97.970, having booked its biggest weekly rise since early March last week.

The Aussie was the big mover early in Asia and was last up half a percent at $0.6904, having bounced from a four-month trough of $0.6865. It was briefly quoted as high as $0.6990 but dealers said that was a miss-hit and the true dealt peak was $0.6938.

The currency's upward swing came after Australian Prime Minister Scott Morrison's centre-right Liberal National Coalition booked a shock win in federal elections, beating the centre-left Labour party, who had been tipped to win.

“The reaction was relatively large because the result was unexpected,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities. “But election results in the past haven't been a big driver for the Australian dollar. A change of government doesn't usually lead to a big change of policy,” he said.

The Aussie also found support on a statement from China's central bank on Sunday that it would maintain the stability of its yuan within a reasonable and balanced range.

Against the yen, the dollar gained 0.1 per cent to 110.195, building on last week's gains, when it booked its first weekly gain against the Japanese currency in five weeks. The yen dipped on a broad improvement of risk appetite among investors. Data showed the Japanese economy was stronger than expected in the last quarter.

Japan's economy grew at an annualised rate of 2.1 per cent, government data showed, accelerating slightly from the previous quarter's growth backed by net export gains. The preliminary reading for first-quarter gross domestic product compared with the median estimate of a 0.2 per cent annualised contraction in a Reuters poll of economists.

The euro was a shade higher at $1.1161, recovering slightly after dropping last week on comments from Italian Deputy Prime Minister Matteo Salvini that European Union rules harm his country. Investors' focus this week is on the May 23-26 elections for the new European Parliament.

Market participants will also eye European readings for a private purchasing managers' index that measures activity in services and manufacturing due on Thursday, after Germany last week returned to growth in the first quarter of 2019. “If we see good PMIs, the euro will form a bottom. It could be the start of the recovery,” said Mizuho's Yamamoto.

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